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M.R. Subramani

CHENNAI, May 24

THE Forward Markets Commission (FMC) has begun an exercise to fix a volume turnover target for various commodity exchanges in the country in view of some of the bourses reporting poor trading.

"We are in talks with the exchanges on fixing a target for the financial year. We are asking them to tell us the volume they can register," the FMC Chairman, Mr Anand Kumar Bhatt, told Business Line.

On Thursday, FMC held a meeting with the Bombay Commodity Exchange (BCE) and on Friday, discussions were held with the East India Cotton Association, he said.

This effort has been launched as various commodity exchanges across the country have been registering poor volume turnover, causing concern and defeating the Government's objective of ensuring wider public participation and remunerative returns to growers.

On the setting up of a multi-commodity exchange, he said FMC had extended the last date for receiving applications to May 31. " As there were complaints that adequate publicity had not been given, we have extended the deadline," Mr Bhatt said and added that seven applications had been received so far.

BCE, Bombay Stock Exchange, a consortium led by NSE and another by Agricultural and Processed Food Products Export Development Authority (Apeda) are reportedly among the applicants.

The first initiative to start the multi-commodity exchange ran aground since the consortium members could not settle the issue of basing the headquarters. The Punjab Government had wanted it in Mohali whereas the rest preferred only the registered office there.

Mr Bhatt said the Indore-based National Board of Trade that runs soyabean and mustard futures had sought to fix a new benchmark price for the futures in view of a big difference in cash and futures.

"For the past three days, the upper ceiling was touched as soon as the trading began. Now, we have allowed the pricing fixing committee of the exchange to fix another benchmark price once the ceiling is touched," he said.

The problem has cropped up since many speculators have sold cheap in order to keep the prices under a bear leash.

To a question on FMC inviting further applications for setting up sugar futures, Mr Bhatt said applications were sought only from existing exchanges to run sugar futures. "First, three parties were given permission to start sugar futures. Two of the them are on schedule to launch the futures, while the other may be delayed," he said. "Among the existing exchanges that have shown interest to start sugar futures, we have graded them based on their performance and sent the recommendation to our parent body, the Consumer Affairs Department under the Ministry of Food and Civil Supplies. We are awaiting a reply," he said.

Stating that FMC was yet to hear anything from the Ministry of Commerce on rubber futures, the FMC Chairman said a Kolkata-based party had made a presentation on tea futures and it had been asked to re-work its plans. On the other hand, the United Planters Association of Southern India had been asked to fulfil certain conditions to be considered for it.

Mr Bhatt also said the commission had recommended futures and options trading in gold and silver. "We have written to the respective ministries for clearance," he added.

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